Looking East

You don't need a fortune cookie to tell you that investing
in China can pay off-last year's fund performance numbers
can do that. The average China Region fund was up over 63 percent
in 2003. But even Confucius knows it takes more than luck to make
money.

Ask Mark Headley, a co-manager of the Matthews China Fund
(MCHFX) portfolio, what sets this fund apart from other China
Region funds, and he'll say it's the fund's focus on
China rather than the entire region. "We've always had a
focus on companies that, if they are not purely Chinese, are Hong
Kong ones with strong interests in China," he says. That
investment philosophy has paid off: For the three- and five-year
periods ending March 31, the Matthews China Fund has ranked top in
its category, according to Lipper.

Keep in mind, not all China Region funds are the same. Funds
under this Lipper category heading range from those dominated by
big Hong Kong blue chips to ones that invest throughout the region.
It also includes others, like the Matthews China Fund, in which the
approximately 40 companies in its portfolio represent more of a
pure play on Chinese companies.

So while this region's story is promising, the truth is that
the markets in China and the surrounding region are still
considered emerging and full of challenges. Investors should think
long term, and be prudent when making their investment
decisions.

Dian Vujovich is an author, syndicated columnist and
publisher of fund investing site www.fundfreebies.com.